Professor Mann recently inherited a 20-acre tract of land from his grandfather in Wisconsin.

Professor Mann recently inherited a 20-acre tract of land from his grandfather in Wisconsin. Unknown to House, who had never visited Wisconsin (even though he lived in the western part of Minnesota), the land contained valuable coal deposits worth $500,000. The Dairyland Coal & Mining Company, who knew about the coal deposits, and had made many unsuccessful attempts to purchase the land from Mann's grandfather, had one of its agents, Jones, approach Mann and offered to purchase his property for $50,000. Mann explained to Jones that he really had no need for this land, but that he did not want to sell it until he knew the land's market value. At this point, the Jones produced documentation previously prepared by the Dairyland Coal & Mining Company showing that 20 acres of land in this portion of Wisconsin typically sold for about $40,000. This information was generally accurate for tracts of land that did not contain coal or other mineral deposits. When Mann asked Jones why he was willing to pay $50,000 for land only worth up to $40,000, Jones explained that he always fancied this particular piece of land, thought it was very beautiful, and that the additional $10,000 represented the sentimental value he attached to the land. The following conversation then took place: